At the start of January, the Texan State Securities Board (TSSB) issued an Emergency Cease-and-Desist Order to the blockchain-based U.K. start-up BitConnect, ordering that it cancel halt its initial coin offering (ICO) for its cryptocurrency, dubbed BCC, then scheduled for January 10th.

In a news release published on the TSSB website, the regulator said that BitConnect was offering tokens with 100% or more annual returns, which led the TSSB to qualify them as “unregistered securities”. The company said that it would be issuing a maximum of 28 million coins and had placed 9.4 million BitConnectx coins into the cryptocurrency marketplace, representing (as of January 3rd) a market value of $4.1B. On its site, it claims “Bitconnect was the fastest growing cryptocurrency of the past year” and it saw over 1.5M members participate worldwide.

The TSSB said the solicitation of its residents was unlawful in the state, as was the company’s search for recruiters to promote the token in Texas. The Texas regulators also said that BitConnect had not shared any information about its financial status, its exact location or how it would earn a profit.

The Texas release also included a general warning against cryptocurrencies: “Investing in cryptocurrencies … carries significant risk because of regulatory and legal actions, competition from other cryptocurrencies, and the extreme volatility in the price of many cryptocurrencies.”

BitConnect also received a cease-and-desist letter from the North Carolina Secretary of State Securities Division; and numerous DDoS attacks against its platform.

Indeed on January 16th, BitConnect announced it was shutting down the BitConnect platform as a result of the actions and surrounding bad press; however, it will continue to “allow Bitconnect to be listed on outside exchanges giving more options for trading”. TechCrunch said that the token would now be “essentially useless” following the shutdown of the trading platform.

The company promised to release all outstanding loans to users’ wallets. Nonetheless, many users will be suffering severe financial losses as the Bitconnect token was at that time trading down -80% and was worth less than $40.

Many in the cryptocurrency community, including Ethereum founder Vitalik Buterin, have openly accused Bitconnect of running a ponzi scheme. On Twitter, Buterin pointed to the fact that the platform said it was generating returns for users at around 1% per day via its “volatility trading software” and BitConnect trading bot. Buterin pointed out, “Ethereum and bitcoin, on the other hand, are backed by a proven and consistent record of 200-700k daily txs and $100k-4m daily txfees”.

It’s likely that the price will continue to plummet following a lawsuit announced by a group of investors at the end of January, seeking hundreds of millions of dollars in damages, alleging that the cryptocurrency exchange platform was “a wide-ranging Ponzi scheme”.